Rosh Hashanah

Happy Rosh Hashanah, the Hebrew New Year. The new year begins for people, animals and legal contracts.

Xenophobic Customer Support

New York Senator Charles Schumer may be experiencing a bit of xenophobic tendencies in his newly submitted bill, S. 1536. This proposed legislation, sponsored by only two other accomplices (Sen. Casey and Sen. McCaskill) seeks to require all U.S. businesses that outsources "customer service communication," via phone or wire, to (1) require that the physical location of the customer service assistance must be disclosed at the commencement of the communication, (2) require U.S. businesses to certify compliance annually to the FTC, and (3) authorize the FTC to penalize businesses that fail to comply.

My goodness. Everyone knows that call centers are located all over the place, both inside and outside of the U.S. Does anyone really care where the call center is located? Is it not more important for consumer purposes that the call center employee communicate effectively so as to properly assist the consumer's inquiry? Frankly, I have communicated with call center employees whom I suspect are located within the U.S. yet speak poor English and are difficult to understand. I have communicated with call center employees whom I suspect are located outside of the U.S. who speak English very plainly.

I'm wondering if this type of legislation is really needed. Does this sort of bill speak more to the fear of foreign workers? The location of a call center is not important. Most people would be surprised that when they place a call to a Miami-based cruise line that they are likely speaking to a call center off a land-locked freeway interchange in Springfield, Oregon. This is but one example of how modern communication technology allows the placement of call centers anywhere in the world. The issue should not be where the call center is located. The issue, rather, should be whether the person on the other end of the line knows how to schedule a cruise, answer a question responsibly, and communicate well.

Is it scandalous? Look in the dictionary!

Is the design of a bottle, shaped to resemble a hand flipping the bird (a hand with the middle finger extended), scandalous and therefore not subject to trademark registration in the U.S.? Here is the proposed mark:

Luxuria, s.r.o. sought to register the mark depicted by the shape of the above bottle. The examining attorney took the position that this proposed mark is scandalous and not entitled to registration in the U.S. The matter was appealed to the TTAB, and the refusal to register was affirmed. The TTAB, citing existing law, confirmed that scandalous material cannot be registered, and confirmed further that vulgar material is scandalous for purposes of denying registration. Of note, the TTAB held that for purposes of defining whether material is scandalous, the PTO examiner can rely on dictionary definitions alone.

Dictionary definitions alone, if a term has no other meaning, are sufficient to satisfy the Office’s burden of showing that the mark is scandalous to a substantial composite of the general public.

Indeed, the examining attorney cited to several dictionary definitions of giving the bird to establish that, as far as lexicographers are concerned, the gesture is scandalous. So there you have it. If you can't tell whether material is or is not scandalous, look in the dictionary.

Petition to Eliminate Software Patents

The White House's website contains a We The People section, allowing common folks to petition the government via the web. The White House promises that it will respond to each petition that amasses a threshold number of e-signatures within a stated period of time. The present threshold is 5,000 e-signatures within 30 days of petition posting. There have been numerous petitions posted, but the one petition that has accumulated the most number of e-signatures in the shortest period of time (over 11,000 signatures in four days, so far) seeks to prevent the issuance of any further software patents in the U.S., and to cancel the software patents that have issued. Here is the text of the petition:

We petition the Obama administration to: 

Direct the Patent Office to Cease Issuing Software Patents 

The patent office's original interpretation of software as language and therefor patentable is much closer to reality and more productive for innovation than it's current practice of issuing software patents with no understanding of the patents being issued. 

Under the patent office's current activity, patents have been come a way to stifle innovation and prevent competition rather than supporting innovation and competitive markets. They've become a tool of antitrust employed by large companies against small ones. 

To return sanity to the software industry - one of the few industries still going strong in America - direct the patent office to cease issuing software patents and to void all previously issued software patents.

Happy Birthday, Scott -- Beat On!

F. Scott Fitzgerald was born in St. Paul, Minnesota on this date in 1896. A distant counsel of Francis Scott Key, for whom he was named, Fitzgerald could not carry a tune, but boy could he write!

Change to Blog Address

Notice: My blog address is migrating from us-ip-law.blogspot.com to us-ip-law.com. Same great blog, just at a different site.

Now You See It -- Now You Still See It!

One prerequisite to copyright protection is fixation. A work must be fixed in a tangible medium so that the embodiment is sufficiently permanent or stable to be perceived for a period of more than "transitory duration." So sayeth the Copyright Act. Under this statutory definition of fixation, is a garden filled with shrubbery and flowers fixed? The Seventh Circuit does not think so. Last February, the Seventh Circuit determined that the constant growth of plants in a garden destroyed the fixation, and thus the copyrightability, of a garden. And three weeks ago, the federal court in California (Kim Seng Company v. J. & A. Importers, Inc., CV 10-742) held that there cannot be copyright in a sculptured food dish, determining that food is perishable and, well, not fixed.

I don't know about anyone else, but I can store an arrangement of food on a plate in my refrigerator for more than a "transitory duration." I did so in college and I still do so. This is just the way it is in real life! Indeed, an examination of my refrigerator will reveal food that has been sculptured on a plate for days. Since copyright is not claimed in taste, but in appearance of food on a plate, a several day chill-out in my frig is not "transitory." As for the Chicago public garden, if the shrubs and flowers in Chicago grow as slowly as mine on the Pacific Coast, is a shrub and flower display really transitory? Just because a lawn is mowed weekly does not mean that  there cannot be a lawn sculptor, right? I mean, aren't brass statues polished periodically? Aren't old paintings touched up every decade or so? Aren't photos enhanced, cropped, stapled, mutilated and put back together?

Does the Supreme Court really need to explain the meaning of transitory to us?

Copyright Protection for Sound Recordings – Now

The Sound Recording Simplification Act (H.R. 2933) was introduced in the U.S. House last week, seeking to extend U.S. copyright protection to sound recordings fixed before February 15, 1972. Presently, §301(c) of the U.S. Copyright Act provides that federal copyright law does not preempt the common law and statutes of any U.S. state with respect to sound recordings fixed before February 15, 1972. This preemption prohibition drops out in 95 years – by February 15, 2067. The newly proposed legislation would delete this section entirely to provide exclusive Copyright Act protection to these sound recordings – now.

All the great hits of The Beatles, The Rolling Stones, Buddy Holly, Charlie Parker, The Beach Boys, The Big Bopper and more, that were fixed prior to February 15, 1972, are presently protected by local and state laws, including criminal laws, right of publicity laws, and a patchwork of other laws. This lack of uniformity, consistency and clarity in protecting this material has been a concern to librarians, historians, archivists and other users. On the other hand, the music industry has developed a comfort level, for the most past, with the present system by creating contract-based relationships and contract work-arounds.

Recorded radio broadcasts of the Four Horsemen, recorded civil rights speeches, recorded scholarly lectures and interviews by Faulkner, Einstein and others, and a host of additional historical material, would be protected in a uniform and certain manner by extending the exclusivity of the Copyright Act to these sound recordings.

Frankly, it makes sense to bring all copyrightable work under the wing of protection of uniform federal copyright law. The development of new digital technologies that permit enhanced access to new and historical works can best be regulated under a definitive and uniform national law. Since the present Copyright Act is the vehicle for national protection of all copyrightable work, except for pre February 15, 2067 sound recordings, the elimination of this singular exception will assist the uniform protection of all work in the face of new technologies.

“Where have you gone Joe DiMaggio …” 

Denton True Young

There, on this day in 1890, well before the so-called Modern Era of baseball, stood Denton True (Cy) Young, pitching for the Cleveland Stingers in his first professional game. Cy pitched in Cleveland, St. Louis and Boston before his amazing 22-year career was complete, amassing 511 wins.

Cy was elected to the Hall of Fame in 1937. The Cy Young Award, given to the best pitcher in each league, was instituted in 1956.

"Let others hunt, or fish, or sail

Afar o'er ocean's foam;

Give me the game that's played among

The sweet green fields of home.

Bases pitch on a level spot,

Beneath a smiling sky,

No sport for pleasure or for health,

With Base Ball then can vie..."


The Base Ball Song, by W.J. Bullock, 1874

New Protection For Film And Video Actors?

WIPO appears to be moving toward the revival of talks to develop a treaty to protect the performance rights of actors in audiovisual works. The potential issues in this treaty would not only extend moral rights to actors over their performance, but would extend control to actors over the ownership of their performance and the transfer or license of their performance to AV producers.

WIPO has been pressing since 1996 for some sort of performance rights protection but has not seen much movement. Its historical white paper appears here. WIPO now is exhibiting renewed energy in developing a consensus of members at this time.

The U.S. does not recognize moral rights in the same way as exists in other legal systems, although there is a limited right of attribution and integrity to authors of works of visual arts (Section 106A). Further, the U.S. has in place a "work for hire" rule in which the commissioning party in AV works receives a copyright interest without an assignment or transfer from the actors.

Any adherence by the U.S. to WIPO's proposed treaty would certainly require a re-work of both Section 106A's limited moral rights and the work-for-hire rule. It would perhaps also require new consideration of an actor's performance as a stand-alone work, separate from the AV material, together with re-thinking the early termination right.

Javier Bardem testified at a recent WIPO hearing concerning the proposed treaty, and his statement is set out here.

The Big 5 - 0 For The Big 4 - 4

Happy Birthday, Mr. President.

More On India's Missing Trademark Files

My post of last May 5th commented on the large number of trademark files that the government of India ... lost. It is now confirmed by India that some of these files have been found, but many still remain ... lost. Last week's announcement from India's Office of Controller General explains that, as of last April, some 37,046 trademark files could not be accounted for. The good news is that some 12,683 files have now been found. As for the rest, the government has been able to reconstruct some files with the aid of the registrants, the government has ignored some files since the marks had not been renewed (the files are still lost, but who cares?) and some 8,183 files continue to be ... lost.

Two comments. First, if one of the purposes of a trademark registration is to allow registrants to protect the commercial value of their marks, how does the Indian government's failure to manage its trademark files allow for commercial growth and confidence in India, and how does all of this impact U.S. business partners of Indian firms? Very scary. And second, it goes without saying that the annual fee "diversion" from the PTO raises the specter of similar burdensome administrative problems with the PTO. Another very scary concern for commercial business that relies on IP.

Bad Faith Patent Litigation is Sanctioned

The Federal Circuit provides an important review of the expected legal and professional standards for non-practicing patent plaintiffs in the pursuit of their infringement claims. The new case is Eon-Net v. Flagstar Bancorp. The opinion describes the plaintiff, Eon-Net, as being in the lawsuit business. It, or its related entities, filed over 100 lawsuits and, in almost all cases, sought to settle quickly at a small fraction of the defendant’s anticipated litigation costs. In this instance, Flagstar Bancorp refused to settle and fought hard.

Eon-Net’s patent relates to a system of extracting information originating from a hard copy document and placed into computer memory. After extensive and expensive discovery, Flagstar filed its motion for summary judgment, confirming that it did not extract customer information from a hard copy document but rather from its website. The district court granted the motion and determined that the case was exceptional and merited an award of fees. The district court further allowed defendant’s Rule 11 motion for sanctions. Significant attorneys’ fees and sanctions were awarded against Eon-Net and its counsel.

The Federal Circuit reviewed the patent and confirmed that the claims and written description “repeatedly and consistently” defined the invention as a process that derives information from hard copy documents. “[T]he term ‘hard copy document’ appears over 100 times in the common disclosure of the [three] patents.” Flagstar’s customer information came from its website and not from hard copy documents. The case was not “a close call.” “[T]he specification unequivocally compels the construction adopted by the district court.”

The Federal Circuit confirmed that an exceptional case finding to support an award of awarding attorney fees must be based on clear and convincing evidence. The Federal Circuit will not overturn a district court’s determination except upon a finding of clear error. The Federal Circuit determined that the district court’s exceptional finding was not clear error because:

Plaintiff engaged in litigation misconduct:

• It destroyed relevant documents prior to litigation.
• It intentionally did not implement a document retention plan. Indeed, plaintiff’s principal testified that “I don’t save anything so I don’t have to look.”
• It engaged in abusive litigation tactics in that it failed to engage the claim construction process in good faith, it failed to offer a construction for any disputed claim terms, it lodged incomplete and misleading extrinsic evidence and it submitted declarations that contradicted earlier deposition testimony.
• It showed lack of regard for the judicial system by testimonial statements from its principal (“I am so sick of this stuff, especially this haggling over stupidities and trivialities which is the name of the game in litigation.”

Plaintiff brought baseless infringement litigation in bad faith and for an improper purpose: 

• The plaintiff’s patent “clearly refutes Eon-Net’s claim construction.”
• The infringement claim had an “indicia of extortion” because “it was part of Eon-Net’s history of filing nearly identical patent infringement complaints against a plethora of diverse defendants, where Eon-Net followed each filing with a demand for a quick settlement at a price far lower than the cost to defend the litigation.” “[T]hose low settlement offers – less than ten percent of the cost that Flagstar expended to defend suit – effectively ensured that Eon-Net’s baseless infringement allegations remains unexposed, allowing Eon-Net to continue to collect additional nuisance value settlements.”
• As a non-practicing patent plaintiff, Eon-Net had little to lose in the litigation. “In addition to its ability to impose high costs to defend against its meritless claims, Eon-Net placed little at risk when filing suit. As a non-practicing entity, * * * Eon-Net did not face any business risk resulting from the loss of patent protection over a product or process.  Its patents protected only settlement receipts, not its own products.”

The Federal Circuit took particular point to explain the obligation of plaintiff’s attorney. While plaintiff’s attorney stated at oral argument that his client was “difficult to control,” the opinion points out the obvious; “an attorney, in addition to his obligations to his client, has an obligation to the court and should not blindly follow the client’s interests if not supported by law and facts.”

On the issue of Rule 11 sanctions, the Federal Circuit upheld the district court’s determination and observed that plaintiff’s attorney “failed to perform a reasonable pre-suit investigation.” The court confirmed that “A reasonable pre-suit investigation, however, also requires counsel to perform an objective evaluation of the claim terms when reading those terms on the accused device.”

An award of attorneys’ fees and costs of $489,150.48 was upheld, as was the Rule 11 sanction of $141,984.70.  Grand total: $631,135.18.

Sobering.

The Federal Court Show: Take This Court Opinion -- Please

Who needs David Letterman, Jay Leno, Jon Stewart, Stephen Colbert or SNL, when we have the Seventh Circuit Court of Appeals? For good times and good humor, nothing beats the Seventh. I’m not certain if the Seventh’s high rise building in downtown Chicago allows the car fumes to wisp upwards or if it is just too dog gone hot in Chicago during this time of year, but the Seventh Circuit cuts some funny opinions.

Why, take today’s opinion – please. The case of Georgia-Pacific v. Kimberly-Clark is chuckles-filled. As Judge Evans points out, time and time and time again, this case deals with toilet paper. And to underscore the focal (oops, I almost wrote fecal) point of the case, the court observes “Are there many other things most people use every day but think very little about? We doubt it.” As funny as this is (repeat: toilet paper, toilet paper, one more time, toilet paper), there’s more. The opinion next targets “top-rate intellectual property lawyers” who breathe the “rarified air” of unfair competition and trademark infringement under the Lanham Act. Now that’s funny. Judge, you had me with toilet paper!

But wait, there’s more. Judge Evans soon lapses into song, “‘I wish I was in the land of cotton, old times there are not forgotten.’” And quickly, lest we forget, the opinion reminds us “But again, this case is about toilet paper, and who really pays attention to the design on a roll of toilet paper?” Apparently, the paper companies.

Indeed, the case is not about toilet paper but about trademark infringement relating to the lattice designs embedded into the sanitary product and its packaging. Toilet paper and its packaging happen to be the medium on which the trademarks appear.

After several pages of chuckles, the opinion settles down a bit and begins an analysis of common trademark concepts of incontestability, trademark functionality, a Supreme Court case, and trade dress. But, candidly, by the time the opinion talks about law, I lost interest. I want to hear more of toilet paper and Dixie! In fact, the legal portion of the opinion relates to the lighthearted quips in the same way that Stiller & Meara related to the audience during The Beetles first appearance on The Ed Sullivan Show – not well. The only thing the opinion does not do is to criticize the hyphen used by each party in their corporate names. Perhaps the court was holding back?

Two days ago, the Seventh gave us another slammer: White Pearl Inversiones S.A. v. Cemusa. Judge Easterbrook did not provide in White Pearl the same level of comic flair as Judge Evans – perhaps this is why he is the chief judge – but the White Pearl opinion possesses sufficient in-your-face sarcasm to rank up with the best of them. In the midst of important analysis concerning jurisdiction and choice of law relating to a contract dispute between foreign entities, the opinion attacks the lawyers. Judge Easterbrook makes certain that we understand that “White Pearl’s lawyers have scoured the legal phrase-book.” He tells us that “White Pearl is represented by the Chicago office of Wilson, Elser, Moskowitz, Edelman & Dicker; Cemus is represented by the Miami office of Hunton & Williams plus the Chicago office of K & L Gates.” Then to underscore the significance, he explains that “All three are substantial law firms with expertise in business law and international trade – as one would expect when a Uruguayan firm based in Rio de Janeiro sues the U.S. component of a multinational enterprise based in Madrid.” Now we know. Of course, none of this has anything to do with the merits, but who cares? It’s fun to attack lawyers and it’s fun to read about an attack on lawyers.

These opinions are not the first time that the Seventh has reached down to vaudeville. But there’s no point dragging up old cases, and old jokes. You get the idea. Courts that treat litigation, litigants and their counsel lightheartedly should not expect too much respect in return. Is this too harsh to state? No one views David Letterman as anything other than a jester. He may be a brilliant man. He may be extremely learned in many subjects. But who cares. He’s F U N N Y. Is this how the Seventh wants to be viewed; irreverent, frivolous, sarcastic, impudent, belligerent? I’m running out of adjectives, someone help me – please.

I wish I was in the land of cotton …

What is Intellectual Property?

I read an excellent article today that speaks to the practical meaning of Intellectual Property. The article, written by attorney Michael Mann, is located here. Mann explains that he used to refer to himself as a practitioner of patent, trademark, copyright and trade secret law. But he aptly points out that these words do not define IP, but refer instead to areas of law that are applied to IP. He explains that IP, in fact, is something else: it is know-how, message, innovation and reputation. Mann's thoughts provide an intriguing way of thinking about what IP lawyers really do. Importantly, his thoughts provide an excellent way of explaining this to clients.

Foreign Authors: Beware of U.S. Copyright Registration Obligations

The Internet’s ability to distribute content, including new print, music and film/video works, to every corner of the world is amazing. But the universal reach of the Internet suggests caution when print, music and film/video creators seek to expand distribution of their content through the inexpensive and universal distribution tool of the Internet.

Prior to the Internet, a book publisher could publish and distribute a title in a designated geographic area where copyright protection was secured. If a print book was published in the United States only, the publisher could apply for copyright registration in the U.S. and not worry about copyright registration in other countries.

The advent of Internet distribution compels publishers and rights owners to consider copyright protection throughout the reaches of the Internet. Since the posting on line of a new work allows downloading throughout the world, the publisher and rights owner of a posted work are faced with a burdensome rights protection problem.

A recent federal district court case highlights the copyright problem regarding a new work published directly to the Internet. The case of Kernal Records Oy v. Mosley (2011 WL 2223422, S.D. Fla., June 7, 2011), deals with the registration requirement of the U.S. Copyright Law for works created outside of the U.S. but first published on the Internet. In the Mosley case, a sound recording was created in Australia and first published by posting on the Internet for downloading. The rights owner did not register the copyright in the U.S. Ordinarily, this would not be a problem for enforcement in the U.S. since Section 411 of the Copyright Act requires registration of a “United States work” in order to bring an infringement claim. The copyright in a work that is not a United States work need not register in the U.S., ordinarily, in order to commence litigation in the U.S. for infringement.

But the definition of a United States work is broad enough to encompass a work created outside of the U.S. by authors who do not reside in the U.S. The Copyright Act defines a United States work as a work first published:

             (A) in the United States;

             (B) simultaneously in the United States and another treaty party or parties, whose law grants a term of copyright protection that is the same as or longer than the term provided in the United States;

             (C) simultaneously in the United States and a foreign nation that is not a treaty party; or

             (D) in a foreign nation that is not a treaty party, and all of the authors of the work are nationals, domiciliaries, or habitual residents of, or in the case of an audiovisual work legal entities with headquarters in, the United States

The Mosley court held that the first publication on the Internet of the Australian sound recording constituted a simultaneous first publication in Australia and the U.S. and, as such, caused the sound recording to be deemed a United States work for purposes of the registration requirement of Section 411. The Florida federal court dismissed the infringement claim brought by the plaintiff rights owner because of failure to obtain registration prior to commencement of the litigation.

The publication on the Internet constitutes a simultaneous global publication leading to the prospect of global infringement. Accordingly, publishers who seek to benefit from the low cost and ease of world-wide distribution afforded by the Internet must not lose sight of the enhanced protection burdens that result. To be sure, the Mosley decision represents the first trial court decision in the U.S. on the need to obtain U.S. registration of a foreign created work first published on the Internet. Mosley places foreign authors and publishers on notice and represents a sobering application of U.S. copyright law to foreign authors of work created outside of the U.S.

The Georgia Peach

Last week, we witnessed the great shortstop for the New York Yankees, Derek Jeter, obtain his 3000th big league hit. Jeter became the first Yankee to reach this milestone, and he did so in grand style with a home run. Jeter has been the Yankee shortstop since 1996, and it took him 15 years to reach 3000 hits.

 By contrast, today marks the anniversary of Ty Cobb’s 4000th hit in 1927. When he retired in 1928, after 23 years in the big league, Cobb held the Major League record of 4191 hits, a mark that lasted until surpassed by Pete Rose in 1985.

Who Knew?

Trademark

Who knew that law practice group names have been trademark registered? I wonder how many law firms have an employment law group that is marketed as their "Employment Law Group"? I'm guessing a lot. It is interesting to note, however, that the PTO has issued a trademark registration for "The Employment Law Group" in Class 42 for legal services (Reg. No. 3436135). There is also a pending application for "Intellectual Property Law" (Ser. No. 85205240) for legal services, a registration for the "Litigation Media Group" (Reg. No. 3051750) for legal services, for "Intellectual Property" (stylized design) (Reg. No. 1690628) for legal services, and "The Construction Law Group" (Reg. No. 2129634) for legal services. These are but a few of numerous trademark filings related to very common legal service offerings of the type provided by, I imagine, thousands of lawyers and law firms. Who knew that these common legal service descriptions could be registered?

Copyright

Who knew that there is no copyright protection for the idea of a crime fighting hair dresser? We should all be cautiously optimistic that the issue of copyright infringement relating to crime fighting hair stylists has been, apparently, resolved. In Cabell v. Sony Pictures Entertainment, the Second Circuit affirmed in last week's unpublished decision that the plaintiff's idea of a crimefightinghairdresser brandishing a hair dryer in stock fighting poses is not protectable in copyright. Here is the plaintiff's artwork:

Here is Sony's movie art for You Don't Mess With The Zohan:

DMCA

Who knew? Notwithstanding the warnings from Lenz v. Universal Music Group, new cases continue to be filed over liability for claimed wrongful takedown notices. Under the Digital Millennium Copyright Act, a copyright claimant can employ the takedown notice procedure in order to remove claimed infringing postings from the Internet. But wrongful takedown notices create the potential for liability for a wrongful takedown. Lenz posted a 29 second video on the Internet of her infant daughter dancing in the kitchen to the music of Prince's "Let's Go Crazy." Universal sent a takedown notice to the ISP claiming that the video infringed the copyright interest in the song and performance. Lenz sued for the wrongful takedown, arguing that the takedown was wrongful because her posting was protected by fair use of the Prince song. The court agreed. The court in Lenz made clear that liability attaches when the claimant who sends the takedown notice does not have a viable copyright claim in light of the poster's fair use. Now comes word that a similar DMCA case is pending in federal court in Ohio. In Smith v. Summit Entertainment, N.D. Ohio, 3:11cv348, Summit sent a takedown notice claiming to own a copyright interest in Smith's musical work posted on line. The music was taken down. Subsequently, Summit acknowledged that it did not have a copyright interest in Smith's music. Smith sued under several theories, including wrongful takedown under the DMCA, plus defamation and other theories. The court allowed several of Smith's claims to proceed forward in ruling on Summit's motion to dismiss, stating in part: "While defendant post hoc and promptly acknowledged that it has no copyright interest in plaintiff's song, that does not matter. Plaintiff alleges that defendant made an unquestionably false assertion in take down notices and the song was taken down." Lawsuits for wrongful takedowns are tracking up out there! Who knew?

July 4th

The Fourth of July is around the corner. Be careful out there!

Washington State Has A New IP Law: Stolen Or Misappropriated Information Technology

Washington State's new law that takes effect on July 22, 2011 creates state-based liability for use of so-called stolen or misappropriated information technology. In particular, the new act creates liability for the use without authorization, as a component in an "article or product," of stolen or misappropriated hardware or software that was available for retail purchase on a stand-alone basis. Before liability is imposed, the law requires advance notice from the claimant and an opportunity to cure. Liability only applies when the product containing the stolen or misappropriated information technology causes "a material competitive injury as a result of the stolen or misappropriated information technology."

The Washington Attorney General is authorized to bring a claim under this new law, as are private claimants. But the law does not identify who can bring a private claim. Certainly, it appears that the owner of the stolen IP can sue, but the new act does not appear to limit claims to parties who themselves have experienced a material competitive injury. At any rate, the law allows for several remedies, including an injunction, plus damages consisting of "actual direct damages" or "statutory damages of no more than the retail price of the stolen or misappropriated information technology." If the misuse is found to be willful, the court can treble the damage award and assess costs and reasonable attorneys' fees.

The foregoing is but a brief and incomplete description of the new Washington law. Interested persons should review the session law and make an independent determination as to its meaning, application and merit. But from my perspective, this law appears to have a very high burden to overcome -- preemption. That is, the very definition of stolen or misappropriated information technology, and the use thereof, appears to fall squarely within the four corners of a patent infringement claim or a copyright infringement claim. Indeed, even though the so-called "information technology" is not the subject of an issued patent or copyright does not take the potential claim out from under the foot of preemption jurisprudence.

In any event, this may all be sorted out in the future. The fun begins on July 22, 2011!

Death on the Plains

This weekend marks the anniversary of Custer's Last Stand. Fought in southeastern Montana in the area of rolling hills and prairie dogs around the Little Bighorn River, some 600 members of the U.S. Seventh Cavalry were outmanned by Sitting Bull's combined force of some 20,000 Sioux and Cheyenne.

On June 25, 1876, Custer's army came upon the Indian village, peacefully camping along the Little Bighorn, and elected to attack. Custer did not believe the information from his scouts as to the true size of the Indian position. Custer separated the army into several columns; he lead one, General Reno another and General Benteen a third. A fourth column stayed in the rear to protect the army's horses. Custer's column was completely and swiftly annihilated while Reno lost about a third of his column.

Reno ordered a retreat that became chaotic, and for the next day fought off the attacking Indians in a holding action from his entrenched positions. The Indians withdrew at noon on June 26th.



Reno was severely criticized for his actions in not coming to Custer's aid. While he was exonerated following an 1879 formal inquiry, Reno's career and legacy were seriously harmed.